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CEO DATELINE—Chamber, tech groups sue to stop Maryland ad tax

Feb. 19, 2021
By William Ehart

Several tech-sector associations and the U.S. Chamber of Commerce sued Maryland on Thursday to stop a new state tax on online advertising revenue.

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Groups representing companies such as Amazon, Facebook and Google joined the Chamber in the suit filed in U.S. District Court. They are the Internet Association, NetChoice and the Computer and Communications Industry Association.

The groups say the tax—a first of its kind in the U.S.—is unfair, unconstitutional and incompatible with federal laws that prohibit state policymakers from instituting taxes specifically targeting online services.
Their complaint states that the tax will “raise costs for consumers and make it more difficult for businesses to connect with potential customers.”

Maryland lawmakers last week enacted the tax by overriding a veto from Gov. Larry Hogan, a Republican. About a dozen states, including New York, Indiana, Montana and Washington, are considering taxing online advertising, the data the Internet giants collect or the services they offer, The Washington Post reported.

Stephen Kranz, a partner at McDermott Will & Emery, who is representing the lobbying groups, told The Post that the lawsuit is also a warning shot to other states. “We hope that policymakers in those states recognize that following Maryland only leads to the courthouse,” Kranz said.

The Post—owned by Amazon CEO Jeff Bezos—noted in the article that it had been among other publications and businesses lobbying against the tax.

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